MANGAL FINANCE LIMITED Vs. EXPRESS CONFECTIONERS PVT LTD

JUDGEMENT

(1.) This application by a petition under sections 433, 434 and 439 of the Companies Act, 1956 (hereinafter to be referred to as "the Act") is presented for an order for winding up M/s. Express Confectioners Pvt. Ltd., a company registered under the Act having its registered office at 55, Baralal Street, Ranchi, which shall hereinafter be referred to as "the respondent". The petitioner is M/s. Mangal Finance Ltd., a company registered under the Act having its registered office at Calcutta in West Bengal.

(2.) The case of the petitioner-company is that the respondent required a certain loan from Small Scale Industries Development Bank of India (in short SIDBI), to the tune of Rs. 80,00,000 for their Bread Project at Ranchi. For the purposes of syndication, etc., of the said loan from the SIDBI, the respondent took the services of the petitioner-company under an oral agreement and agreed to pay a sum of Rs. 1,60,000 in the following manner : (a) Rs. 64,000 for preparation of project and filing of papers for loan syndication, (b) Rs. 56,000 for processing of final loan documents for SIDBI, H.O. approval, (c) Rs. 24,000 on receipt of sanction letter for loan ; and (d) Rs. 16,000 on disbursement of loan. It is stated that the loan was sanctioned by SIDBI under their letter dated September 25, 1996. Out of the said amount of Rs. 1,60,000 a sum of Rs. 9,000 was paid in advance and a balance of Rs. 1,51,000 remained to be paid by the respondent to the petitioner-company. Consequently, the petitioner-company raised a bill dated September 27, 1996, for the above-mentioned amount of Rs. 1,51,000. The bill is annexure 1. The case of the petitioner-company is that under their letter dated April 16, 1997 (annexure 2), the respondents admitted their claim for Rs. 1,51,000 and agreed to pay the same in two instalments of Rs. 1,35,000 and Rs. 16,000 by issuing two post-dated cheques. Rs. 1,35,000 was to be paid before the disbursement of the loan ; whereas the other sum of Rs. 16,000 was to be paid after disbursement. Post-dated cheques were undertaken to be despatched on April 1, 1997. However, the respondents made payment of Rs. 31,000 only and did not pay the remaining amount in spite of repeated demands and requests made in this behalf. Consequently, the petitioner served the respondent with a demand notice dated July 12, 1997 (annexure 3) in accordance with the provisions of Clause (a) of Sub-section (1) of Section 434 of the Act claiming a sum of Rs. 1,42,645 including interest at 24 per cent, per annum amounting to Rs. 22,645 till date. Under the demand notice, the respondents were required to make payment within 21 days from the date of receipt thereof. The demand notice was received by the respondents on July 17, 1997. Instead of making payment as demanded, the respondents sent a reply dated August 2, 1997 (annexure 4), taking a plea that there was a settlement between the parties in respect of the claim and pursuant to that settlement, they had paid a sum of Rs. 31,000 to the petitioner-company. Therefore, in view of the payment of Rs. 31,000 by way of full and final satisfaction of their claim, the petitioner-company was entitled to nothing. Consequently, this company petition was presented in this court on April 22, 1998, seeking winding up of the respondent-company.

(3.) The respondent has contested the petition asserting, inter alia, that simply because a demand notice claiming Rs. 1,42,645 was served on them and they have not paid the same for the reasons stated in annexure 4 to the petition, an order for their winding up cannot be passed on the ground that they are unable to pay the debt of the petitioner-company. According to them, they are a solvent company meeting all their liabilities and are capable of meeting their contingent and prospective liabilities. The petitioner-company having failed to show to the satisfaction of the court that the respondent-company is unable to pay their debt, the prayer for winding up cannot be granted. The respondent have also contended in their counter-affidavit that in view of their stand from the very beginning that there was a settlement and in consequence of such settlement, a sum of Rs. 31,000 was paid by them to the petitioner-company, the debt of the latter due to non-payment of which the order for winding up is sought, becomes a disputed one. Once the debt is found to be bona fide disputed by the respondent, the remedy of the alleged creditor lies in the civil court and not by way of a winding up proceeding. Therefore, it has been contended on behalf of the respondent that this petition for winding up be dismissed and the petitioner-company directed to seek the remedy in the appropriate forum by instituting a suit.